FC Cincinnati's West End stadium could have a 9 percent 'sales tax'

FC Cincinnati hopes to build a stadium on the site of Stargel Stadium in Cincinnati’s West End neighborhood.
The Enquirer/Mike Nyerges

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FC Cincinnati fans raise a team scarf before the USL soccer match between the New York Red Bulls II and FC Cincinnati, Saturday, Sept. 16, 2017, at Nippert Stadium in Cincinnati. (Photo: The Enquirer/Kareem Elgazzar)Buy Photo

In FC Cincinnati's agreement with Cincinnati's redevelopment authority, a surcharge could essentially make the sales tax rate at the stadium 29 percent higher than the rest of the city and Hamilton County.

A rarely used funding mechanism called a "new community authority" will be established at the site, according to Greater Cincinnati Redevelopment Authority documents. Essentially a small tax district, it will cover the stadium and "certain adjacent properties," according to the authority.

The authority's board approved a financing plan with FC Cincinnati at its meeting Monday morning (see resolution and proposal (or term sheet) below).

The plan calls for a 2 percentage point surcharge on all taxable revenues from the stadium. Though not strictly a sales tax, the authority said the surcharge will function as one. Hamilton County's sales tax rate is 7 percent (5.75 percent for the state, the rest goes to the county).

For the stadium, the money from the surcharge is pledged to the redevelopment authority for repayment of bonds.

Ohio law requires a board of trustees to be formed to manage the money. Cincinnati City Council would have the duty of forming the board, which also likely would include representatives of FC Cincinnati.

Major League Soccer officials met Tuesday and were expected to discuss FC Cincinnati's bid to join the league. The soccer stadium will not be built unless the team is awarded a franchise.